Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Can a transfer be made from an individual's DPSP to his or her
ex-spouse's RRSP upon marriage breakdown?
Position: No. However, such a transfer may be made if the transferor first transfers the assets of the DPSP to his or her own RRSP and then transfers the assets to his or her ex-spouse's RRSP.
Reasons: Law does not provide for a direct transfer. However, subsections 147(20), 147(19) and 146(16) allow an indirect transfer.
XXXXXXXXXX 2000-003370
G. Kauppinen
September 7, 2000
Dear XXXXXXXXXX:
Re: Transfer from a Beneficiary's Deferred Profit Sharing Plan ("DPSP") to an
Ex-Spouse's Registered Retirement Savings Plan ("RRSP") on Marriage Breakdown
This is in reply to your request for a written opinion on the above-noted subject.
Although there are no provisions in the Income Tax Act (the "Act") which permit a transfer from an individual's DPSP to the RRSP of the individual's spouse or former spouse on marriage breakdown, an indirect transfer will accomplish the same result. The following explains how to do this.
Interpretation Bulletin IT-528 (Transfers of Funds Between Registered Plans) ("IT-528") (copy enclosed) deals specifically with transfers between registered plans. Transfers from DPSPs are discussed in paragraphs 1 to 4 of IT-528. Therein it states that a member of a DPSP may elect to have a lump-sum amount that is otherwise payable to him transferred to an RRSP of which he is the annuitant in accordance with the provisions of subsection 147(19) of the Act. When this occurs subsection 147(20) of the Act will apply to prevent the inclusion of the amount in the member's income solely because of the transfer. Subsection 147(20) of the Act also provides that no taxpayer may deduct an amount in respect of the transferred DPSP amount.
IT-528 further states in paragraph 5 that a transfer under subsection 146(16) of the Act from one spouse's unmatured RRSP to the other spouse's or former spouse's RRSP may occur on a roll-over basis provided that the spouses are living separate and apart and the transfer between RRSPs is made under a decree, order or judgment of a competent tribunal, or under a written separation agreement relating to the division of property between the transferor and the transferor's spouse or former spouse in settlement of rights arising out of, or on the breakdown of, their marriage.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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